China Plays SimCity... Epic Edition

China plans to take 9 urban centers and built a 16,000 square mile metropolis.

And yes, in case you were wondering, 16,000 is huge, equivalent to a big chunk of New England (well, not counting Maine).

The “Turn the Pearl River Delta Into One” 5 year plan seeks to take what is the heartland of Chinese manufacturing (based around Hong Kong - because that is where the money used to come from, and Shenzen, which China built as an internal rival to Hong Kong), and roughly 10% of the Chinese economy.

Basically, right now all 9 cities have very different rules and regulations. China's central government is actually quite weak: traditionally, regional laws and rule were more important, while the central government would hand down objectives and 5 year plans and expect local governments would follow their intent.

The objective is to level the playing field, and thus help businesses.

The other part of the plan is, of course, huge infrastructure spending, including 29 new high-speed rail lines, many new hospitals, billions spent on roads etc etc.

What is the takeaway?

I have become convinced that the natural limit these days to economic development is the population of your country. China is working well at leveraging that population into ever increasing economic power.

Long story short: we're screwed. While we are stifling companies and development, while we are thinking about how to protect ourselves, when we think "we are number one, and I deserve this," China is pushing like mad. Personally, at this point, I would bet on China (though I think they have a recession to go through to clear bubbles and bad debt before they finally emerge the victor).

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